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The Insurance Regulatory and Development Authority of India (IRDAI) mandates compliance by Financial Information Users in the Insurance Segment

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The IRDAI recently by way of a circular on Participation in Account Aggregator (AA) framework as Financial Information User (FIU) has prescribed certain compliance requirements for an FIU in the Insurance Sector.

The Reserve Bank of India (RBI) Master Direction on Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016 (RBI Directions)  defines an FIU as an entity registered with and regulated by any financial sector regulator.

The IRDAI Circular prescribes the following requirements for FIUs in the insurance sector:

(i) Financial Information, as defined in the RBI Directions, including Insurance policies, provided by a Financial Information Provider (such as an insurance company / insurance repository) shall not be used or disclosed except as specified in the standardized consent artefact provided by the customer;

(ii) The FIU must disclose prominently on their website the names of Account Aggregators (AA) through which information is obtained;

(iii) The FIU shall only obtain and use the Financial Information that is required to perform its functions as per its regulatory responsibility and instructions;

(iv) The FIUs shall endeavor to make AA related applications user friendly by making it multilingual; and

(v) The FIUs shall abide by the code of conduct as specified by the IRDAI and as applicable to the, including redressal of grievances of customers.

Recently, SEBI has also issued a consultation paper on collating and defining use cases of Financial Information Users in the Account Aggregator Framework in Securities Markets which also takes cue from the RBI Directions. Such cross jurisdictional regulatory cohesion is an essential ingredient in ensuring ease of business and making India a more favorable and business friendly economy.

A copy of the IRDAI Circular is enclosed herewith.

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